Academic journal article Strategic Review for Southern Africa

Revolutionary Challenges for Economic Managers *

Academic journal article Strategic Review for Southern Africa

Revolutionary Challenges for Economic Managers *

Article excerpt

1. INTRODUCTION

In this paper, challenges at four different levels for South African economic managers are distinguished, namely:

--The global level, presented by the process of economic globalisation.

--The continental level, presented by the new initiatives for the development of Africa (referred to as the New Partnership for African Development--NEPAD).

--The national level, presented by the socio-political needs for economic transformation in South Africa.

--The micro-economic level, presented by a neo-liberalism on the role and objectives of corporate business activity.

It is appropriate that this symposium on "Revolutionary Challenges for South Africa" should start with a discussion on challenges for economic managers presented by a changing economic environment. History provides many examples of major socio-political revolutions initiated by evolutionary economic changes, and the growing discontent of people with the economic environment in which they have to live and toil.

Unlike the general theme of this symposium with the emphasis on revolutionary challenges, this presentation on the economic background follows a more subtle identification of evolutionary challenges. What is now evolving in the economic world, be it at the universal, continental, national or corporate level, should rather be seen as a gradual and irreversible process of economic progress towards an ultimate integrated world economic system.

2. THE PROCESS OF ECONOMIC GLOBALISATION

Globalisation or the integration of the economies of the major industrial countries of the world is not a new process. It did, however, receive a new impetus during the last quarter of the 20th century because of:

--revolutionary changes in communication systems, mainly as a result of the introduction of satellite linkages;

--major revolutionary developments in computer technology;

--the enhanced availability and use of air transport;

--the introduction of new management techniques through the internet and information technology; and

--new financing techniques that facilitated the transfer of funds across national boundaries.

Not only industrial countries have been drawn into the process of economic globalisation. In recent years, most of the emerging market and developing economies were on an increasing scale forced by events to become part of the process of economic globalisation. South Africa and other developing countries in a similar situation had to choose between a policy of deliberate intervention through the application of measures such as foreign exchange and international trade controls to become marginalised outside of the global economy, or to join the process.

At this juncture, there is an ongoing debate on whether economic globalisation is good or bad for the less-developed countries of the world. The major criticism against the process is that globalisation leads to increasing disparities between rich and poor. This is not a new debate. Indeed, it has been held against the capitalist economic system for ages that it inherently leads to a growing disparity between rich and poor. The market economy tends to compensate the innovator and the entrepreneur absolutely and relatively more than the servant and the worker. Globalisation is indeed an extension of the basic principles of the market economy, together with its virtues and its disadvantages, to all countries of the world.

A further argument against the globalisation process is that the developing countries of the world are not in a position to compete with the established multinationals of the industrial world. Developing countries need more time to increase skills and to become more competitive before they could venture into an unprotected world of a globalised free market system.

The counter-argument is that the capitalist system may create greater disparities between rich and poor, but in the end both rich and poor accumulate more wealth and attain a higher standard of living than what could be achieved in an alternative system. …

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